Daily GK Challenge

More practice: Indian Economy & Banking Awareness

5 more SSC CGL questions from the same chapter, with step-by-step solutions. Try each one, then reveal the answer.

1. Q1easy

   The Gini coefficient is used to measure:

   • AThe rate of inflation
   • BThe growth rate of GDP
   • CThe level of unemployment
   • DInequality in the distribution of income
   Show answer & solution

   Correct answer: (D) Inequality in the distribution of income

   The Gini coefficient is calculated from the Lorenz curve. It ranges from 0 (perfect equality: everyone has the same income) to 1 (perfect inequality: one person has all the income). A higher value means a more unequal society. So it measures inequality in income distribution.

2. Q2easy

   Stagflation refers to an economic situation in which:

   • AHigh inflation exists along with slow growth and high unemployment
   • BPrices fall continuously while output rises
   • CBoth inflation and economic growth are high
   • DThe economy grows fast with stable prices
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   Correct answer: (A) High inflation exists along with slow growth and high unemployment

   The word combines 'stagnation' and 'inflation'. Prices keep rising while output growth is slow or stagnant and unemployment is high, which makes it hard to fix with normal policy. A continuous fall in prices is deflation, not stagflation. So stagflation is high inflation with slow growth and high unemployment.

3. Q3medium

   The share of their net demand and time liabilities (NDTL) that banks must keep with themselves in the form of cash, gold or approved government securities is called the:

   • ACash Reserve Ratio
   • BBank Rate
   • CStatutory Liquidity Ratio
   • DMarginal Standing Facility
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   Correct answer: (C) Statutory Liquidity Ratio

   The Cash Reserve Ratio (CRR) is kept as a cash balance with the RBI and earns no interest. The Statutory Liquidity Ratio (SLR) is kept by the bank itself in liquid assets: cash, gold or approved government securities. Bank Rate and MSF are lending rates, not reserve ratios. So the answer is the Statutory Liquidity Ratio.

4. Q4medium

   In the Union Budget, fiscal deficit is defined as:

   • ATotal expenditure minus total receipts excluding borrowings
   • BRevenue expenditure minus revenue receipts
   • CFiscal deficit minus interest payments
   • DRevenue deficit minus grants for the creation of capital assets
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   Correct answer: (A) Total expenditure minus total receipts excluding borrowings

   Revenue expenditure minus revenue receipts is the revenue deficit. Fiscal deficit minus interest payments is the primary deficit. Revenue deficit minus grants for capital assets is the effective revenue deficit. Fiscal deficit = total expenditure − (revenue receipts + non-debt capital receipts), which shows how much the government must borrow. So fiscal deficit is total expenditure minus total receipts excluding borrowings.

5. Q5medium

   In Indian national income accounting, 'National Income' refers to:

   • AGross Domestic Product at market prices
   • BNet National Product at factor cost
   • CGross National Product at market prices
   • DNet Domestic Product at market prices
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   Correct answer: (B) Net National Product at factor cost

   Start from GDP at market prices. Add net factor income from abroad to get GNP, then subtract depreciation to get NNP at market prices. Subtract net indirect taxes (indirect taxes − subsidies) to get NNP at factor cost. This last figure is what is called National Income, so the answer is Net National Product at factor cost.